This is the moment you identify partners from mere suppliers.
This is not a health-related post: no doubt your dealership is doing everything possible to protect your staff’s health, but what about the business’ health?
We are in uncertain times and in uncertain times we need as much help and understanding as possible from all stakeholders.
Dealerships can suspend business and temporarily send staff home but what about suspending other costs?
Inventory is the largest item in on the dealership’s balance sheet, some of it is fully paid up, but most of it is financed by Banks or OEM schemes.
Our advice is to contact your funders and ask for free stocking for the time your business is closed, also seek to increase the term of your existing stocking loans by at least 30 days.
Neither you nor your funder is in it for just a quick buck, you have a long term relationship with them, so seek their help. This is the moment you identify partners from mere suppliers.
But dealerships can help funders to help themselves. Whilst we would all prefer customers to be flooding into showrooms, this quieter period is a perfect time for housekeeping. Conduct a thorough stocktake of all vehicles on site and reconcile it against the Vehicle Stock Book and “Work In Progress’ lists. This will identify any vehicles that have been delivered but not invoiced, then raise and issue the invoices immediately to improve cashflow.
It’s early in the month so in many cases, there will still be vehicles onsite that have been invoiced at the end of February. Those vehicles attract VAT, payable in March: reverse these invoices to further improve cash flow.
Check all of the vehicles onsite against your funding lines, frequently audits will find vehicles that have been swapped with other dealers but remain on original funding lines in error.
Check all vehicles onsite against online listings, ensure every vehicle that is physical, is advertised. There will be many self-isolating, frustrated shoppers that will take virtual tours of your dealership, so ensure that they have the largest choice possible.
Once you have fully reconciled your substantive audit, update your dealer management system accordingly and share your stock list with your funders. Transparency helps build trust. When a funder sees you have nothing to hide and are on top of your business, they are more likely to support it.
Running a dealership has never been easy and uncertainty just makes it that little bit more complicated.
Adrian Walsh is the Founder and CEO of CheckVentory an Inventory Validation platform that is used globally by Dealer Groups and Floorplan funders to reduce risk and increase commerce.